It makes sense to review the way you buy software – it might save money

hI’ve blogged about software licensing before, and have hopefully managed to explain the various options and the cost saving possibilities – especially in number 12 of my Top ICT Money Saving Tipsh and in “Get the best deal on Microsoft software”. So, having done that ‘top-down’ stuff – explaining licensing from the MS point of view - I thought it might be an idea to reinforce it from the other direction.

To make sure that I didn’t confuse the story with too much inside knowledge, I asked Gerald Haigh to take another look from a school’s perspective. Gerald was an ideal choice as he looks at ICT from a school leadership perspective – he writes for TES, NCSL and The Guardian, as well as writing books on school leadership. So here’s Gerald’s story, passing on some thoughts from conversations with two people – Richard Gibbons from one of our Authorised Education Resellers (AERs), Bechtle and Nyall Monkton, who’s ICT Manager at Dean Close School in Cheltenham.

Richard, who’s a mine of information about licensing, reminds us that the fundamental choice for school ICT managers is whether to buy Microsoft software licences outright with money up-front – ‘perpetual licences’ – or to pay an annual subscription instead. The most common outright purchase scheme for schools is Academic Select, and the subscription scheme is the Schools Agreement. Richard says that schools aren’t always clear about the choice, because software is most often sold as a perpetual licence without schools realising there’s a choice. Schools Agreement can be, in his words, “a well-kept secret”.

That’s a pity, he says, because although he’s careful to not to be dogmatic, it’s pretty clear he believes that most schools he deals with are better off with Schools Agreement. It comes with Software Assurance included, for one thing, which means they’re entitled to upgrade to whatever is the latest version of the software. In today’s fast-changing world, says Richard that’s significant.

“Network managers will ask me before they buy if there’s a new version of some software coming. They’ll postpone a purchase just on the strength of a ‘maybe’. But with Schools Agreement they can buy what they want now, safe in the knowledge that they can upgrade.”

There are other benefits, too. Schools Agreement means you get the Enterprise version of the software, with all that means in terms of extra features, says Richard,

“The one that’s key for schools, with new and stronger legislation on data protection, is BitLocker Drive Encryption in Windows 7.”

(The array of extra benefits available with different licensing arrangements is helpfully set out currently in a post on Richard’s blog)

Then, for many schools, removing the big up-front payment for the licences will make all the difference to their ability to provide staff and students with the latest software. That was very much the case for Nyall Monkton, ICT Manager at Dean Close School in Cheltenham, one of Richard’s customers. Nyall, arriving at the school in May 2008, wanted to move quickly to give his students up-to-date ICT, and he wasn’t happy with the forest of perpetual licences that he had to manage. (He has a thick wad of them to show to visitors who ask him why he made the change)

“I came from a business environment and I was used to corporate subscription licensing. Richard explained there was something similar for schools.”

Moving to Schools Agreement, with a much reduced initial cost enabled Nyall, with Bechtle’s support, to roll out Windows 7 quickly (he was one of the earliest adopters in Summer 2009), as well as opening up a number of other possibilities, including giving all of his students a school email address with the aid of Microsoft Exchange.

Really, though, for Nyall, the bottom line is that the Schools Agreement is just a lot more businesslike, akin to what he was used to in the commercial world. He’s freed from the task of keeping tabs on his pile of separate licences, and there’s a real sense of control.

“It fits the way I manage my budget. I know what I’m going to spend across everything – PCs, servers, printers. Year on year my budget remains almost the same. But if you buy licences outright you have less control over costs – one year they’re fantastically high, and then three years where they’re low.”

The consistent annual payment makes it much easier to work with school governors and finance committees, who understandably don’t like to find big spikes in expenditure at what to them can look like random intervals.

All that said, why aren’t more schools using Schools Agreement? Richard Gibbons says, “It’s a mindset thing. People like to feel they own something. But really they should show due diligence and study the alternatives.”

And that fits, in a way, with Nyall’s contention that there’s a need for network managers to be more aware of strategy and planning.

“I came from business and I had that instilled into me. That’s often lacking.”

So how do you feel about that? Should network managers be more business-minded? Or do they have quite enough to do already, just managing their networks? Is the answer for school business managers to be more aware of the issues around budgeting for ICT, and the choices between perpetual and subscription licences? Gerald told me about a call he made when researching this piece. He left a voicemail for a school business manager, hoping to talk to her about the school’s software licensing policy. When the call came back, it was from the network manager. Presumably the business manager felt that was the kind of thing that had nothing to do with her. Despite it being a big annual outlay for the school. Food for thought there maybe?

There are a number of different options for perpetual and subscription licences, and the main ones for schools are: